Since 1947 ISO has published close to 20,000 standards - standards for just about everything - plastics, glass, screw threads, surgical implants, for example. Shipping containers are another good example, possibly the poster child of all standards in terms
of the benefits realised - the impact on global economic growth since the international adoption of this ISO standard in the mid-1960’s is well documented. All these standards are managed inside the ISO framework within individual Technical Committees.
Technical Committee 068, or TC 068, or sometimes simply "68", is the committee that oversees all of the ISO standards relating to the Financial Services industry.
"68" meets annually in the Spring, usually in a different location each year. This year we’re in London, and that’s where I’m headed as I write.
"68" has representation from over 30 countries, and several large global financial organisations such as SWIFT, Visa, ANNA, and the ECB. These meetings are essentially a United Nations of Standards Geeks!
Think about a simple equity trade. The settlement instruction you send to your custodian bank will contain an ISIN to identify the security, it will contain one or more country and currency codes, it may contain a MIC to represent the exchange where the
trade was executed, and possibly also a CFI code. Your instruction is likely to identify the trade counterparties using a BIC.
These are the basic building blocks that we use to manage our business. They are all ISO standards developed by, managed and maintained by "68".
"68" is organized into a three sub-committees, or "SC"s, one for Banking and Payments, one for Securities and related instruments (such as FX), and one for Security (that is, security of the anti-fraud variety). Each Subcommittee is further organized into
working groups. For example, SC 04 has a group that is working very hard at the moment to add support for derivative instruments into the CFI standard. SC 07 has a group that is managing a periodic review of the currency code standard.
The "SC"s all meet this week too. One other group under "68" that is also meeting this week is the Registration Management Group (RMG). This group is responsible for ISO 20022, still a relatively new kid on the standards block.
As the adoption of 20022 gathers momentum in the here and now, "68" and the RMG are looking to the future. Last year a new version of the 20022 standard was published with a promise to address formalized business process definitions and validation rules.
As part of this release the entire 20022 repository was made publicly available, and this is encouraging many banks to consider leveraging the model as a basis for their own internal information architecture – something that has been mooted for a long time,
but not really possible until now. "68" has a team looking at semantics that will eventually enable non 20022-xml syntaxes to call themselves 20022-compliant. Another team is busy working a proposal to implement a business process catalog. Rules will be
next on the agenda – I hope.
The issue of rules really pushes my buttons. Today, rules are documented in plain-English but not as a technical artifact within the 20022 repository. This has given rise to a perception amongst some early adopters of 20022 messages that these rules can
somehow be considered optional. Don’t even get me started on that. What if two communities adopted the same message, but implement different subsets of the rules – can you imagine the ensuing confusion? Need I go on?
All the familiar concepts and constructs of 20022 - variants, extensions, external code lists – they all began life as a conversation within the RMG. Rules - you are next.
Sometimes I take a step back and try to put things into perspective. Our industry is often criticized for not creating anything when compared to "real industries" that design aircraft and build bridges for example. We’re simply a bunch of middlemen taking
a slice of the action as the money flows through our part of the chain. There is an element of truth in this of course - but our industry is fundamentally no different than any other that creates a product, a product that is purchased by middlemen such as
wholesalers and retailers, and sold on with a margin of profit.
It is comforting to know that the work we do makes a significant contribution to the efficiency of financial markets, and ultimately, to the bottom line for millions and millions of individuals who trust our industry to manage their pension funds and their
life savings. When you think about it like this one realizes what an honor and a privilege it is to serve on these committees. Quite humbling really.
So, the next time you look up a currency code or a BIC address tip your hat and give a nod of appreciation to the unsung heroes of "68".